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Call between Trump, Trudeau yields no movement on steel tariffs

Prime Minister Justin Trudeau and U.S. President Donald Trump discussed Washington's tariffs on Canadian steel and aluminum on Monday but no talks on lifting the sanctions are planned, a Canadian source familiar with the matter said.

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Prime Minister Justin Trudeau, right, spoke with U.S. President Donald Trump on Monday about steel and aluminum tariffs. No deal was reached. (Christian Hartmann (Pool)/Charles Platia/Reuters)

Prime Minister Justin Trudeau and U.S. President Donald Trump discussed Washington's tariffs on Canadian steel and aluminum on Monday but no talks on lifting the sanctions are planned, a Canadian source familiar with the matter said.

After the conversation between Trudeau and Trump, the Prime Minister's Office released a statement saying the two leaders had "discussed next steps in addressing steel and aluminum tariffs." It gave no details.

A White House statement said they discussed "bilateral trade issues," but did not elaborate.

The Canadian source, who requested anonymity given the sensitivity of the situation, said the phrase "next steps" was more of a general expression.

"There are no specific negotiations taking place, nor are there any specific negotiations scheduled," said the source.

"The prime minister raises it with the president every time he talks about it."

PMO and the office of Foreign Minister Chrystia Freeland declined to give more details.

Continued trade fears

Trudeau's government strongly opposes the sanctions, which Trump said in late May he was imposing for reasons of national security. Ottawa unveiled a series of counter measures against U.S. goods as a retaliatory measure.

The dispute threatened to overshadow the signature of a new continental trade pact with the United States and Mexico last November. Although Canadian officials initially suggested Ottawa might not take part if the sanctions were still in place, Trudeau ended up signing.

Trump touches Trudeau's shoulder as they prepare to sign a new United States-Mexico-Canada Agreement that is replacing the NAFTA deal on Nov. 30, 2018. The USMCA must still be approved by lawmakers in all three countries. (Martin Mejia/The Associated Press)

The new United States-Mexico-Canada Agreement (USMCA) is designed to replace the 1994 North American Free Trade Agreement (NAFTA), which Trump had threatened to abandon unless major changes were made.

Such a move could have crippled the economies of Canada and Mexico, which both send more than 75 per cent of their goods exports to the United States every month.

The statement from Trudeau's office said the two men had discussed the importance of trade and jobs in the wake of the talks to renegotiate NAFTA.

Although Trump said on Dec. 1 he would soon give formal notice of his intention to terminate NAFTA, giving six months for lawmakers to approve the USMCA, he has so far not acted.

Industry officials say U.S. Senate Republicans asked Trump to delay immediate termination to give Congress additional time in 2019 to take up the issue.

A person close to Republican Senator Chuck Grassley of Iowa, the new chair of the finance committee that oversees trade issues, said he was uneasy about terminating NAFTA given "the uncertainty it would cause for U.S. businesses and farmers and the damage that uncertainty could do."